Another heavy smashdown for gold. But what are the reasons for it? There is no reason. The mainstream propaganda merely claims that there might be a "taper" of QE. But are you supposed to believe that slightly less hyperinflation would cause a collapse in the gold (and silver) prices? As usual, the two metals move in sync, meaning it's probably the paper that is being moved en masse.

It suggests the banksters are desperate. They're going to get even more heavy-handed soon, like confiscating gold and threatening a massive fine, as they did in 1933 in the US and similarly in 1966 in the UK.

Then again, perhaps they know the price is going to be revalued massively higher. Bill Gross has noted that the borrowing by the US Treasury is projected to taper, so B.S. Bernanke's tapering would have to follow anyway. And if the US is following its two poodles in balancing its budget, it means the end of dollar hegemony, sound money and therefore a new gold standard. Japan claims it will balance its budget in 2019, whilst the UK has postponed from 2015 to 2016. Germany has already balanced her budget at 0.1% of GDP last year with Spain, Italy and France legally obliged to do so too. A gold standard would mean VERY HIGH gold prices.

The propaganda claims gold has fallen due to B.S. Bernanke's comments on tapering QE. Yet when QE Infini3 and QE 4 Ever were announced, gold continued being hammered down when it should have rocketed. Zero Hedge, however, reports that the corrupt CME that refused to compensate MF Global victims from blatant theft has again raised margins on gold by 25%: "CME Hikes Gold Margins By 25%".

What we're seeing is western socialism. As Lord Adair Turner said, some banks are not socially useful. This is a back-handed compliment to the banksters and he is now working for them again. It implies that some ARE socially useful and by "socialism" he means confiscation; another tax. The purpose of the banks is to separate you from your wealth. As shares have followed Japan's pump and dump, gold too is hammered with the margin hike. Previous excuses were that those who held gold were selling to cover their losses on shares; pure BS.

Never mind, then, that the only way of exiting QE is for the US to balance its budget and so avoid a spike in interest rates. Never mind that balanced budgets mean sound money. And never mind that with sound money, you may as well back your paper with gold for what little borrowing you do.

Meanwhile, sound money also means the banks can no longer be bailed out by the central banks which can no longer print paper at will. Hence the capital adequacy ratios are being tightened up.

However, the tapering may be fake.

The US is supposed to halve its deficit for this year to $642bn according to the CBO, though the White House predicts $973bn. Subsequent years are supposed to see a slow, steady decrease.

But the UK is predicted to maintain a steady ￡120bn in deficits until 2016/17 when it's supposed to fall to ￡49bn. Previously the UK was supposed to massively reduce the deficit by ￡2014 to a mere ￡23bn. With ￡115bn of its ￡375bn QE, yet to be used, it will have to be extended to cover following years if the rate of purchases is maintained at one third of total issuance. If the UK continues whilst the US reduces QE, the pound would implode.

But such an early telegraphing of policy is unusual and may not materialise and as B.S. Bernanke says, tapering may be followed by un-tapering. Zero Hedge reports that JP Morgan only has another month's worth of gold. If the US Treasury borrows more, QE will increase. It is hard to believe the US would ever want to balance its budget, when exporting fiat paper in exchange for other nations' goods is so rewarding. With another 20 years of Baby Boomer to defraud of any return on their pension with the ERISA law, don't expect any significant rise in rates any time soon either.

Furthermore, it's ridiculous to dump gold so heavily that you're guaranteed the worst price. Furthermore, they know beforehand so the timing is pantomime. When B.S. Bernanke announced zero interest rate in Dec08, the overnight rate had already been at zero since Jul08.

Here's some double-speak: The 23 per cent fall in gold prices has triggered a surge in physical demand in Asia. James Steel, precious metals analyst at HSBC in New York, said: “The slide in gold prices may trigger a positive demand response from price-sensitive buyers.”

But few believe that will be enough to trigger a price rebound as long as investors continue to sell.
- Gold tumbles through $1,300 on Fed move

As Jan Skoyles of the Real Asset Company points out, price-discovery is on the CRIMEX which has only a small proportion taking physical delivery. Meanwhile the REAL price is this paper-gold price plus hefty premiums.

The dollar is a burning building. Debts are the highest in all of history. So the banksters have shone a light in your face by smashing the gold price and the propaganda is telling you it's hot outside too. But rush into the burning building and they'll probably throw a bucket of "bail-in" petrol over you.

"first they ignore you, then they laugh at you, then they fight you, then you win"
- Ghandi

As well as gold and silver (and platinum but not palladium so much), other commodities have been hammered as well as equities in a pump and dump and even bonds have seen a dip. This is the bogus "risk-on; risk-off" where the banksters pump and dump all asset classes as one so that retail investors have nowhere to run and nowhere to hide. Only residential property is not pumped and dumped because they want the sheeple borrowing $200,000 for a $50,000 shack.

Clear evidence of manipulation is the disconnect between physical demand and dumping of paper by the institutional banksters playing with other people's money: The metal touched $1,268.70 an ounce earlier today, the cheapest since Sept. 16, 2010. Physical demand was “again aggressive yesterday, and overnight, in Europe,” according to Kitco Metals Inc. a precious-metal refiner and research company in Montreal.
- Gold Rebounds in New York After Slumping to Cheapest Since 2010

The "official" paper gold price is obviously nothing more than a fiction which is why physical prices add on a hefty premium with the record demand: Central banks in the ‘ignored’ part of the world shopped up a storm as well, purchasing 109.2 tonnes in Q1, for the seventh consecutive quarter central bank purchases were over 100 tonnes.
. . .
Vietnam’s 20% however is nothing compared to those seen in some stores in China. Ned Naylor-Leyland estimates that coin, bar and jewellery shops have been selling at 24% premiums.
. . .
These ever-present, and increasing premiums are leading many to now speculate over the ‘two-tier’ gold market. Where prices appear to be set in the paper gold market, ie COMEX, but it’s another story when it comes to physical gold.

We all know which markets is ultimately boss – the physical one.

In the graph below, courtesy of Koos Jansen, we can see that the demand for physical tonnes to be delivered on the Shanghai Gold Exchange is reaching global production levels.
- Taking the blinkers off the gold analysts

The last time there was this farce of a dual gold price was during the 1960s, when the London Gold Pool collapsed.

The only excuse the banksters have is the supposed tapering. Yet there are two dissenters and on opposing sides of the argument: Mr Bullard said it was a mistake to raise market expectations of an imminent wind-down of the programme.

Explaining his decision to dissent from the central bank's policy decisions for the first time, he claimed the move would damage the Fed's credibility at a time when core inflation - a proxy for long-term inflation trends, currently running at 1% - was well below the Fed's 2% target.
. . .
Another committee member also dissented from the statement, but for the opposite reason to Mr Bullard. Kansas City Fed president Esther George expressed concern that the Fed's bond buying would destabilise financial markets.
- Stock markets stabilise after sharp falls

These are not genuine opinions, just propaganda designed to confuse the retail investors.

Jim Rogers says the smashdown hasn't ended yet. But he may be referring ot the duration rather than the price level. Although the major miners have been guilty of selling gold forward at a loss in the 1990s and calling it "hedging", it is unlikely they would sell forward lower than the cost of production, which is where gold and silver is now : Golden Minerals Co. announced that it has suspended operations at its Velardena mine as of June 21, 2013, in order to conserve the asset until operating plans and prices for silver and gold indicate a sustainable cash margin for operations.
. . .
In February 2013 the company anticipated the Velardena operations would achieve operating cash neutrality during the third quarter 2013, assuming gold and silver prices of $1,600 per ounce and $30 per ounce, respectively. In May 2013 the company projected a $5 million negative margin from the operations for the remaining three quarters of 2013 at prices of $1,500 gold and $25 silver.
- Golden Minerals Announces Suspension of Production

If they can herd enough sheeple out of gold, they may even let it bounce back much higher.

You also have to ask why the NYFED has asked Germany to wait seven years for 300 tonnes of gold (which, in the absence of accounting fraud, is supposed to be just sitting there gathering dust) when India alone has imported that much in just the last two months.

Anyone with spare cash that they don't need for a few years should be buying physical gold. In the short term it will be held low. It may even fall, though with miners shutting down, it won't be by much. But it will be guaranteed to rise.